A producer company can be defined as a legally recognized body of farmers/ agriculturists with the aim to improve the standard of their livelihood, and ensure a good status of their available support, incomes and profitability. Under Companies Act 1956, a Producer Company can be formed by 10 individuals (or more) or 2 institutions (or more) or by a combination of both (10 individuals and 2 institutions) having their business objective as one of the following:
of the primary produce of the Members or import of goods or services for their benefit.
Difficulty of Formation: Promotion of a company is not an easy task. A number of stages are involved in company promotion.
Separation of Ownership and Management: The ownership and management of public company is in different hands.
Factory System: The company form of entity leads to large-scale production.
Speculation in Shares: The joint stock companies facilitate speculation in the shares at stock exchanges.
Any of the following combination of producers can incorporate a producer company:
On registration under Section 581 C (1), the Producer Company shall become a body corporate as if it is a private limited company to which the provisions contained in this Part apply.
It cannot become or deemed to become a public limited company.
The main objective of the producer company is to facilitate the co-operative business as companies and to make it possible to convert existing co-operative business into companies.
The objects given under section 581B are as follows:
One Time Fee
Service Provide Within 7 Days
One Time Fee
Service Provide Within 15 Days
Services Provided Before the Due Date
producer company started with the objective of harvesting ,procurement ,grading ,pooling ,handling ,marketing, selling and export of primary things and import important things for its members
minimum 5 directors are required for start a producer company .
To start a producer company minimum 5 lakh capital must be required .
There is a limited liability in producer company , Producer company having a better Management.
A producer company can be formed with 10 or more individual as a producer or with two or more producer institutions or with the combination of both the conditions .
4 board meetings is mandatory to be conducted in a year and a maximum gap between a meeting is 3 months .